Loophole allows Miami candidate to keep firm clients secret

As a member of the Miami-Dade County school board, Carlos Curbelo has voted on education policies and contracts for four years. Now, running for a congressional seat, he’s looking to have a say in far more consequential government decisions.

For most of that time, Curbelo has been drawing a six-figure salary to represent government and public-relations clients.

Yet the Republican candidate refuses to disclose who those clients are.

Some of them are political candidates who have hired Curbelo as a campaign strategist or as a Spanish-language media spokesman. Those clients are publicly known. But the others aren’t, raising questions as to why Curbelo insists on keeping them secret.

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“He’s violating the spirit of the rules,” said Adam Rappaport, senior counsel for Citizens for Responsibility and Ethics in Washington, or CREW, a liberal watchdog group. “Technically, he is exploiting a loophole that allows him not to disclose.”

Other than Mount Sinai Medical Center on Miami Beach, the only private clients Curbelo has acknowledged so far — under pressure from a journalist on television — are two brothers convicted of embezzlement in absentia in Ecuador. Curbelo said that he set up meetings in Congress for Roberto and William Isaías, whom the Ecuadorean government want extradited. The brothers say they are victims of political persecution.

Curbelo maintains that he will answer questions on any specific client, and he has, though he won’t say how much the Isaías family paid him.

He calls Democratic Rep. Joe Garcia’s request for Curbelo’s full client list “arbitrary” and refuses to voluntarily disclose it, noting that he’s not required to do so under state or federal laws. However, that’s only because Curbelo put his firm, Capitol Gains, under his wife’s sole ownership five years ago.

“I comply with the law,” Curbelo said during a television interview last week. This week, he referred questions about the company to his campaign spokesman.

Politically, Curbelo apparently has betted that any focus on ethics will hurt him less than it will Garcia, whose former chief of staff went to jail and whose 2010 campaign remains under federal criminal investigation. Still, Curbelo’s approach has given Garcia an opening to attack the Republican on his claim that he’s a business owner.

“There’s only one requirement for having a small business: You have to have a small business. He doesn’t — his wife does,” Garcia said. “Then you can’t stand up and say, ‘I know what it is to be a small businessman.’ You’re a lobbyist who works for your wife.”

Federal law requires that candidates identify anyone who has paid them more than $5,000 in the past two calendar years. Curbelo’s lack of disclosure prompted the Florida Democratic Party to file a complaint against him last month with the U.S. Justice Department.

But while the statute mentions disclosure, the U.S. Senate and House of Representatives interpret that requirement differently, said Rappaport, the CREW attorney.

The Senate requires disclosure of clients “even though the clients’ payments were made to your employer, firm or other business affiliation.” The House doesn’t go as far, requiring disclosure “only if you have an ownership interest in the employer.” Curbelo doesn’t anymore, because his wife owns the company.

The rules would not change if Curbelo were to defeat Garcia, said Brett Kappel, a federal government-relations law expert and Washington-based attorney with the Arent Fox firm. No client disclosure would be required, because members of Congress are not allowed to privately represent anyone, period.

“They’re not allowed to provide services or represent someone before the body that they’re a member of,” Kappel said.

Wadi Gaitan, Curbelo’s communications director, said the candidate would cut all ties to his firm if elected.

But voters still wouldn’t know who hired Curbelo in the past, said John Hennelly, Garcia’s campaign consultant, who drew a parallel between all the outside conservative groups that have backed Curbelo and his secret clients.

“If we send Carlos Curbelo to Washington, will he represent us or the guys who gave him $6.5 million?” Hennelly said.

Curbelo founded Capitol Gains in 2002. The firm, which is based in Coral Gables, has five employees, including his wife, Curbelo has said. One worker, Nicole Rapanos, is managing his campaign, which has listed Curbelo as the company’s “principal.”

Until 2009, Curbelo was the firm’s sole owner. Then he put Capitol Gains under his wife Cecilia’s name — according to him, on the advice of U.S. Senate attorneys. At the time, Curbelo was working for then-Florida Sen. George LeMieux.

John Sassman, chief counsel for the U.S. Senate Select Committee on Ethics, declined to comment on any advice his office may have given Curbelo, citing confidentiality rules. The Senate’s ethics manual prohibits compensation and affiliation with firms that provide professional services, so by no longer being his firm’s owner, Curbelo avoided any official conflicts.

To further distance himself from the company, Curbelo says he also put Capitol Gains in the custody of theGray Robinson law firm while he worked for the Senate. That arrangement ended in 2010. Yet the firm’s owner remained Cecilia Curbelo — who stopped working at Capitol Gains a year earlier to become a stay-at-home mom.

Last year, Carlos Curbelo reported a salary of $105,000. His wife was paid by the company, but Curbelo did not have to disclose how much.

Curbelo revealed the income in his congressional candidate disclosure. He has also had to file annual disclosures with the state since winning his school board seat in 2010. Those forms require clients to be listed only if three requirements are met, including that the filer own more than 5 percent of a company. Curbelo doesn’t, because his wife is Capitol Gains’ sole owner.

Curbelo would have had to disclose any conflicts of interest between his clients and people or firms coming before the school board. He notified the school board attorney of a single potential case, in June 2011, advising that his firm had been hired by Genting East Coast USA, the Malaysian casino-resort giant.

Constituents have to take Curbelo on his word that no other conflicts exist, because identifying other clients is not easy.

For example, Curbelo has made calls to the media in the past about Juan Carlos Tovar, a Miami real-estate developer from Venezuela. Tovar faced scrutiny over a Doral project and was briefly arrested last year over filing a false police report, a charge that was later dropped.

Curbelo said Tovar never hired him, and Tovar backed him up. Yet Curbelo still introduced Tovar to reporters and spoke positively about him, which could have created confusion over whether Tovar was a formal client.

In the case of the Isaías brothers, who live in Miami, there is no public record linking them to Curbelo. There are records of their generous political contributions to politicians, including Garcia.

Curbelo might have had to register on the Isaíases’ behalf under the Foreign Agent Registration Act, which requires disclosure from Americans who represent foreigners, because the brothers are not U.S. citizens. But Gaitan, Curbelo’s spokesman, said Capitol Gains wasn’t paid by either Roberto or William Isaías. Curbelo has said he represented the “family.”

Curbelo also never registered as the family’s Capitol Hill lobbyist, saying he didn’t ask lawmakers for anything. But that may still be lobbying, said Kappel, the D.C. attorney.

Federal law lists specific requirements for someone to register, including that a lobbyist engage in two or more contacts with legislators or their staffs. Over a three-month period, a lobbyist must also be paid more than $3,000 and spend at least 20 percent of his or her time on the client.

“The public and media relations efforts in which the firm participated did not require any of its employees to register,” Curbelo’s spokesman said when asked which thresholds applied to Capitol Gains’ representation.

Curbelo, for his part, has countered that Garcia violated House rules by doing the Isaías brothers’ bidding, even though they aren’t his constituents. The New York Times reported in Marchthat Garcia made a phone call on the family’s behalf.

Garcia has said it’s “routine” for his office to assist many South Floridians who ask for immigration help — though in this case, the brothers are also significant campaign donors.